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Cameron's cuts

Mike Power, LondonJune 25, 2015

UK leader David Cameron is pushing ahead with drastic welfare cuts that will affect the lowest-paid and jobless. On top of that he wants to redefine the parameters of child poverty, as Mike Power reports from London.

Image: Reuters/S. Plunkett

Poverty, says Prime Minister David Cameron, himself an Eton-educated millionaire whose cabinet contains more millionaires than any other in British history, is not relative. And what's more, long-accepted metrics of child poverty are "absurd," he said in a speech on Monday.

His comments were made ahead of new figures on child poverty released on Thursday, which showed little change with around 2.3 million children living in poverty in 2014.

Cameron's comments followed recent mass protests in London and other major cities against his government's plan to slash welfare payments by an extra £12 billion (17 billion euros) in the coming year. The chancellor of the exchequer, George Osborne, called the cuts to the income of the lowest-paid and unemployed, a "simple matter of fairness."

The London march, which was attended by 250,000 people, was organized by People's Assembly Against Austerity, a new campaign group. Sam Fairbairn, of the People's Assembly, called for a national campaign of "protest, strikes, direct action and civil disobedience" and said the campaign's aim was to build a mass movement that would "kick David Cameron out of office."

Mandate to cut

David Cameron's center-right Conservative party, which won a shock victory in last month's elections after dozens of opinion polls had predicted a hung parliament, say they won a mandate from the public to push ahead with public spending cuts.

Expected targets are the unemployed; low-paid workers who receive top-ups in the form of tax credits, or low-paid housing benefit recipients who receive help with rent and mortgage payments. In his speech earlier this week, Cameron refused to rule out cutting payments to those unable to work through disability. Pensions will not be cut, the government has promised.

hand holding coins copyright: John Stillwell/PA Wire URN
Cutting off the hand that feeds the ToriesImage: picture-alliance/empics

Tax credits amount to £30 billion a year, and the IFS says the government could save around £5 billion a year reducing these payments to their 2003 value. This would be at the expense of 3.7m low-income families, who would each lose £1,400 a year. Housing benefit, at £26 billion per year, is also under threat, with reduced payments to the young an easy win. It is also expected that payments to the once-universal child benefit, which is now means-tested, will also be reduced.

The measures will be announced in next month's budget, since the party refused to identify the targets of the new wave of austerity in pre-election pledges. Cameron is rejecting the child poverty figures since they are measured as a proportion of relative earnings, which during recent years of recession, have fallen.

Enver Solomon, Director of Evidence and Impact at the National Children's Bureau, rejected Cameron's conclusions. "We must protect state benefits that support poorer families, so that these children enjoy a standard of living that will encourage them to develop and flourish. It is deeply worrying that the government is considering cuts that will have a direct effect on children. We should be protecting this support in the same way that pensions are protected, to ensure they rise year-on-year."

Opposition disarray

In the aftermath of the shock election win, Ed Miliband and Nick Clegg, the leaders of Labour and the Liberal Dems resigned, leaving the rudderless political opposition to the cuts in disarray.

But opponents such as veteran leftwinger Jeremy Corbyn, who is running for the Labour leadership in a move favored by party traditionalists, told the crowds assembled in front of parliament last Saturday: "‘It is David Cameron's cabinet of millionaires - they are the people who are the real spongers. They are the people who are given free rein to live out their Thatcherite fantasies at the expense of ordinary, decent communities throughout these islands. Austerity is devastating these communities."

In a comment piece for the Sunday Times, Chancellor George Osborne and Work and Pensions secretary, Ian Duncan Smith, in the first public statement on the scope, targets and ideology for the cuts, said the planned £12 billion cuts to Britain's annual £220 billion welfare bill were designed to make work pay better than unemployment.

Announcing plans to cap benefits at £26,000 a year per family would mean that no household would receive more in out-of-work benefits than the average working family earns.

Alison Garnham Chief, Executive of Child Poverty Action Group, said David Cameron's legacy would be the largest rise in child poverty in a generation. "Almost a decade ago, the Prime Minister spoke of poverty being a moral disgrace and an economic waste. That was right then and is right now. No road to opportunity starts with policies that may end leaving three million children in poverty. No moral mission involves taking away tax credits for our poorest children. No serious plan for the low-paid begins with making them poorer by cutting their tax credits."

child sitting on wall
A bleak outlookImage: imago/blickwinkel